ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Financial liquidity refers to how easily assets can be converted to ready cash without affecting its market price. Assets like stocks and bonds are very liquid and can be converted into cash within days.

Detailed explanation-2: -Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. Cash is the most liquid of assets, while tangible items are less liquid. The two main types of liquidity include market liquidity and accounting liquidity.

Detailed explanation-3: -For a company, liquidity is a measurement of how quickly its assets can be converted to cash in the short-term to meet short-term debt obligations. Companies want to have liquid assets if they value short-term flexibility. For financial markets, liquidity represents how easily an asset can be traded.